Shenzhen Logistics Park Business

Shenzhen is the base of the Group’s core logistics business. Following the industrial and urban development trends, the Group is actively pushing forward the revamp and upgrade of its logistics parks across Shenzhen in order to reinforce and promote its position in the city’s logistics industry.As at the end of December 2020, the Group managed and operated a total of three logistics projects in Shenzhen. Together with the Liguang Project, the construction of which has officially commenced at the end of 2019, the logistics projects of the Group in Shenzhen had a total land area of approximately 640,000 square meters and an operating area of approximately 570,000 square meters. The overall occupancy rate of the projects in operation in Shenzhen was approximately 90%.

South China Logistics Park is strategically located alongside Meiguan Expressway near the Meilin Checkpoint in central Shenzhen with smooth and convenient vehicular access to an extensive transportation network which provides connections to Huanggang Border Checkpoint (6 kilometers), Yantian Port (25 kilometers), Shekou Port (20 kilometers), Shenzhen Airport (30 kilometers) and other destinations. South China Logistics Park is currently engaged in bonded logistics, cross-border e-commerce businesses, as well as operation of "The Outlets-8th", the "Longhua Luxury Cars Mall", Qianhaiwan Longhua Showroom for Parallel Import Automobiles and wine storage providers in Shenzhen. In view of the tough economic conditions, South China Logistics Park has actively explored the potential of increasing its revenue and profits with its existing resources during 2020. It also actively expanded the high value-added bond business by conducting intelligent upgrade at its supervised warehouses, developing new customer relationships, strengthening the stickiness of existing customers, fostering collaboration with tenants of the park and maintaining good operation environment.

The Group has been actively driving the planning and construction of the second phase of South China Logistics Park. With a site area of 77,000 square meters, the second phase of the park will be developed and constructed in two stages, and the construction of the first stage has already commenced. During the first half of 2020, the construction schedule was adjusted as a result of the Pandemic, and the construction work is now steadily progressing based on the revised schedule. Taking advantage of the positioning of Shenzhen where the park is located, and in order to seize the significant opportunities arising in the industry, the second phase of South China Logistics Park will develop as a global procurement and supply chain management platform, corporate headquarters as well as e-commerce and logistics financing platform. The second phase of South China Logistics Park will be developed into a comprehensive cluster zone for modern logistics and supply-chain service industries.

The Group has been actively driving the planning and construction of the second phase of South China Logistics Park. With a site area of 77,000 square meters, the second phase of the park will be developed and constructed in two stages. The construction schedule was adjusted as a result of the Pandemic. The design has been optimized taking into account terrain and cost control considerations. The facade has been completed while landscaping and installation of digital equipment are in progress. Delivery is expected in 2021. Taking advantage of the positioning of Shenzhen where the park is located, and in order to seize the significant opportunities in the industry, the second phase of South China Logistics Park will be developed into a global procurement and supply chain management platform, corporate headquarters as well as e-commerce and logistics financing platform. The second phase of South China Logistics Park will be developed into a comprehensive cluster zone for the modern logistics and supply chain service industries.

Shenzhen International Kanghuai E-commerce Center, with an operating area of approximately 138,000 square meters, is situated at Pingan Road, Guanlan Street, Longhua District, Shenzhen, with superior geographical location and convenient traffic. It is the Group’s first asset-light project operated by way of leasing a site area. The park provides comprehensive services including warehouse services, large data center, office buildings, dormitories, restaurants and supermarket, etc, and it has implemented smooth interactive sharing and smart interchange of data across the park by establishing a smart park information management system in 2019. In 2020, the park was certified as a “National AAA-level Logistics Enterprise”（國家3A級物流企業）and “Shenzhen Public Innovation Space”（深圳市眾創空間）. At present, it has achieved satisfactory operating results and successfully attracted a number of branded logistics enterprises., and the project attained an overall occupancy rate of 90% at the end of December 2020.

The Liguang Project with a site area of approximately 45,000 square meters located in Longhua New District, Shenzhen. The construction of which officially commenced at the end of 2019, will comprise 100,000 square meters of room-temperature warehouse, 50,000 square meters of cold warehouses and 18,000 square meters of office, trading and showroom area providing logistics storage, trading, display, distribution, co-loading, urban delivery, distribution processing and other comprehensive logistics services. The Liguang Project is expected to be put into operation in 2023 and will become a modern, high-standard, intelligent and eco-friendly benchmark logistics park. Upon completion of this project, the Group will further strengthen its presence in the logistics market in Shenzhen.

The smart commercial and trading park in the Chenglingji District of Yueyang City in Hunan Province （湖南岳陽城陵磯智慧商貿園區項目）is a park management project undertaken by the Group in 2019. The project has a gross floor area of 250,000 square meters. The first phase of the project will comprise storage facilities, of which 50,000 square meters of high-standard warehouses and sorting and distribution centers have been completed. The second phase will offer commercial auxiliary facilities. The project officially commenced operation in October 2020 and has attracted various renowned domestic corporations, thereby achieving an occupancy rate of approximately 84%.The project will become the first integrated smart commercial and trading logistics park featuring commercial and trading, storage and e-commerce showroom functions in Yueyang City. It will facilitate the development of the logistics industry in Yueyang City as well as the whole Hunan Province.

Moreover, the Group and China Railway Guangzhou Group Co., Ltd.（中國鐵路廣州局集團有限公司）entered into a cooperation agreement, pursuant to which the parties agreed to jointly invest and establish a joint venture to upgrade and transform the Pinghunan Railway Freight Yard into a comprehensive logistics hub. This hub has a site area of 900,000 square meters and an expected gross floor area of approximately 800,000 square meters. The first phase of the project will engage in warehouse storage, port container depot and rail container depot services. The second phase of the project involves the construction of a modern logistics park over the railway freight yard. The implementation of the project will allow the Group to accumulate high-quality long-term assets, enlarge the scale of the Group’s logistics operations and network coverage, and enhance its market position in the Guangdong-Hong Kong-Macao Greater Bay Area, which is in line with the Group’s business development strategy and plan. The Group is actively driving the establishment of the joint venture.

On 18 August 2020, the Bay Area Express（灣區號）, the first freight train running from Shenzhen, China to Europe, was launched. It departed from the Shenzhen Pinghunan Railway Station to Duisburg, Germany. Following the development of the route, this freight train between Shenzhen and Europe is operated and managed by a joint venture set up by the Group and Sinotrans Limited. The Group owns a 40% equity interest in this joint venture. The launch of this train helped to establish a new international land transportation route linking the Guangdong-Hong Kong-Macao Greater Bay Area, Central Asia, Eastern Europe and Western Europe. It offers a safer, greener and more stable means of transport, thereby facilitating the development of the foreign trade demonstration pilot zone in Shenzhen.

Shenzhen International South-China Logistics Co., Ltd.

Shenzhen International West Logistics Co., Ltd.

Shenzhen International Kanghuai E-commerce Center

updated 15 July 2021